AeroVironment stock forecast as its revenue and backlog jumps

AeroVironment stock has come under intense pressure in the past few months, crashing from $417 in October last year to $140.80. That downtrend is now being tested after the company published a strong earnings report, demonstrating solid revenue and backlog growth.

AeroVironment published strong numbers

AVAV stock rose by over 3% after the defense contractor published its financial results. These numbers showed that its revenue rose by 6% in the first quarter of fiscal 2027 to $480.5 million. 

This increase was driven by a $15.5 million product sales and $10.3 million in service revenue. Its Autonomous Systems segment had over $346 million in sales as demand for drones continues to grow. 

This growth will likely continue growing because of the changing nature of warfare today, where cheap drones are becoming more popular. Its Space, Cyber, and Directed Energy (SCDE) segment made over $134.5 million in revenue. 

AeroVironment’s gross margins jumped to 31%, driven by its product revenue and offset by the services segment. Most notably, its loss from operations narrowed to $10.9 million from $69.3 million in the same period last year. Wahid Nawabi, the CEO said:

“Our customers are continuing to field autonomous capabilities at increasing scale, and our priority is expanding manufacturing capacity across our sites and strengthening our supply chain.”

AeroVironment’s backlog continued growing, reaching $1.5 billion, up from $1.2 billion from the previous quarter. On Wednesday, the company reported that it had been awarded a $468 million contract to produce high-energy laser weapon systems for the counter-drone missions. This contract covers the Army Enduring-High Energy Laser (E-HEL) program.

Its other notable contracts were the $500 million precision strike and defensive systems, $464 million space and directed energy, and $117 million uncrewed aircraft system.

AeroVironment’s management expects its revenue growth will continue and its profitability metrics improve. It now expects that its annual revenue will jump to between $2.12 billion and $2.22 billion, with the adjusted EBITDA being between $305 million and $325 million.

Yahoo Finance data shows that analysts expect the annual revenue to rise by 10.8% this year to $2.19 billion followed by 15% growth to $2.53 billion.

AeroVironment stock price technical analysis

AVAV stock chart | Source: TradingView

The daily chart shows that the AVAV stock has been in a strong downward trend in the past few months and is now sitting at a crucial support level. It has failed to move below this level - $134 - several times since June this year. That is a sign that shorts are afraid of placing trades below that level.

The stock formed a triple-bottom pattern whose neckline is at $207, its highest level on August 14 this year. Therefore, there is a likelihood that investors will start buying the dip in the coming days or weeks. If this happens, the initial target to watch will be the psychological level of $200. This target is about 35% above the current level.